Transfer of Property and Property rights

IN THE HIGH COURT OF KERALA AT ERNAKULAM

Mat.Appeal.No. 217 of 2004()

1. VASANTHAKUMARY, SHANMUGAVILASAM VEEDU,… Petitioner

Vs

1. OMANAKUTTAN NAIR,… Respondent

For Petitioner :SRI.S.ABDUL RAZZAK
For Respondent :SRI.JOHN MATHEW

The Hon’ble MR. Justice R.BASANT
The Hon’ble MRS. Justice M.C.HARI RANI

Dated :05/06/2009

O R D E R

R.BASANT &

M.C.HARI RANI, JJ.

Mat.Appeal No.217 of 2004

Dated this the 5th day of June, 2009

JUDGMENT

BASANT, J.

In a transfer for consideration in the name of 2 persons where such consideration is paid exclusively from the separate fund of one of them, is Section 45 or the salutary rule of equity underlying Section 45 of the Transfer of Property Act applicable ? This is the short question that arises for consideration. To be more specific, the question is whether Section 45 or the principle therein can apply when the consideration is paid “out of exclusive funds of one of them” and not “out of separate funds belonging to them respectively”?

2. This Appeal is filed by the wife whose petition for declaration that she is the absolute owner of the property purchased under Ext.A3 and for consequential relief was dismissed by the Family Court. She was found to be having only half rights in the property.

3. On fundamental facts, there is no serious dispute. The property in question was acquired under Ext.A3 sale deed for 2

consideration. The marriage between the spouses took place on 25.01.1986. The sale deed Ext.A3 in their favour was obtained on 26.10.1988. In the document, in page 3, there is an unambiguous recital about consideration which on translation reads roughly as follows:

“The consideration for this document has been obtained from Murukan, brother of

Vasanthakumari (the appellant herein) and

that represents the share which she is

entitled in her family property.”

4. The document of acquisition shows that the acquisition was in the name of both the husband and the wife. Though the document is taken in the name of both the husband and wife, there is no recital whatsoever that they are to enjoy the property equally or jointly. There is of course a statement that tax is to be paid hereafter in the name of both of them. Except this, the recitals in the document do not give any idea as to how the property is to be enjoyed.

5. The wife/petitioner/appellant claimed that she is entitled to a declaration that she is the absolute owner of Ext.A3 property. She prayed for an injunction restraining her husband from creating any document or encumbering the property in question. In the course of the proceedings, it was revealed that 3

trees valued at Rs.10,000/- by the Advocate Commissioner had been cut and the logs removed by the husband. The wife had claimed the entire value thereof from the husband.

6. The matter was taken up by the Family Court along with other connected matters. All the 4 matters were disposed of by a common judgment. We are concerned only with the relief claimed in O.P.No.448 of 2003. It was found by the Court that both the husband and wife are entitled to half share each in the property. Consequently the wife was not granted declaration and injunction as prayed for. An amount of Rs.5,000/-, being half the value of the trees cut and removed, was directed to be paid by the husband to the wife.

7. Before the court below, the wife/appellant examined herself as PW1. A brother of hers was examined as PW2 and a neighbour was examined as PW3. Exts.A1 to A5 were marked. Ext.C1 report of the Commissioner was also marked. No oral evidence was adduced by the respondent/husband. He did not prove any document also.

8. We have heard the learned counsel for the appellant . There is no representation for the respondent though he has been served and has entered appearance through a counsel. 4

9. The learned counsel for the appellant assails the impugned order on the following grounds:

i) The court below erred grossly in not

adverting to the relevant recitals in Ext.A3 at all. ii) The court below ought to have held,

following Section 45 of the Transfer of Property Act and the principle underlying the same that the respondent, who has not paid any amount towards the consideration for Ext.A3 sale deed is not entitled for any share in the property and that the appellant is exclusively entitled to rights over Ext.A3 property.

10. Ground No.1: We are perfectly satisfied that the court below has erred grossly in not even referring to the crucial recital that appears in Ext.A3, the sale deed, relied on by the appellant. The nature of the pleadings and evidence suggests that importance or significance of the recital was not brought to the notice of the court below in the course of the trial. That conclusion appears to be inevitable from the totality of circumstances as also the nature of the pleadings, evidence and the arguments advanced as reflected in the impugned order. 5

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But, all these cannot absolve the courts of their responsibility and duty to consider the recital in the document which is admittedly there and which clinches the issue so far as the case of the appellant is concerned. We hold that non-consideration of the recital by the court below is totally unjustified. The challenge succeeds.

11. Ground No.2: On facts, in the light of the relevant recital, there can be no room for any dispute at all. The parties who were married in 1986 had acquired the property under Ext.A3 sale deed dated 26/10/1988. The purchase was in the joint name of the husband and wife. Funds came exclusively from the kitty of the wife. The husband had not contributed any amount towards the sale consideration. It is unnecessary to look for oral evidence on this aspect. The clear and unambiguous recital in the document clinches the issue as to who had paid the consideration and from whose fund the consideration had been given entirely and exclusively.

12. The purchase was in the joint names. Tax was directed to be paid in the joint names. But consideration came exclusively from the fund of the appellant/wife. What is the nature of respective rights, if any, which the parties have over 6

Ext.A3 property in these circumstances? This is the short question of law that is to be considered now.

13. The relevant statutory provisions appear in Section 45 of the Transfer of Property Act. We extract Section 45 below:

45. Joint transfer for consideration:-

When immovable property is transferred for

consideration to two or more persons and

such consideration is paid out of a fund

belonging to them in common, they are, in

the absence of a contract to the contrary,

respectively entitled to interests in such

property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such

consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary,

respectively entitled to interests in such

property in proportion to the shares of the consideration which they respectively advanced.

In the absence of evidences as to the

interests in the fund to which they were

respectively entitled, or as to the shares

which they respectively advanced, such

persons shall be presumed to be equally

interested in the property.

(emphasis supplied)

14. Section 45 of the Transfer of Property Act imports into Indian law a rule of equity, fairness and justice which was recognized under the English law. When acquisition is in joint names and consideration has been paid out of a common fund, 7

rights of the joint owners will be proportionate to their share in the common fund. This is what the first part of Section 45 declares.

15. The 2nd part of Section 45 deals with the situation where property is acquired in the joint names of persons and the consideration comes not out of a common fund; but from the separate funds of the acquirers. In such an event, Section 45 declares that their share of rights in such property shall be proportionate to the contribution made by them respectively from their separate funds.

16. The 3rd part of the Section is in the nature of a proviso which declares that where there is absence of evidence as to the interests in the common fund or the share in which consideration has been paid, there must be a presumption that all acquirers have equal rights in the property.

17. In the instant case, the first part of the Section does not obviously apply as there is no case at all that the purchase in the joint names was made utilising consideration from a common fund. The 3rd part of the Section also has no application whatsoever as there is unimpeachable evidence in the document itself as to the person who had exclusively and entirely 8

contributed the consideration for the purchase.

18. The only question is whether the 2nd part of Section 45 would apply. We have emphasized the relevant portion while extracting Section 45 above. Here consideration is paid exclusively by one of the acquirers and not from “the separate funds” respectively of all the acquirers. The recitals in Ext.A3 do not show that there was any contract between the parties as to their share of rights in the property. The recitals do not even show that the acquirers are to enjoy the property equally. The only possible argument is that as consideration was paid not “out of the separate funds belonging to the acquirers respectively”, the 2nd part of Section 45 cannot apply. Consideration is paid out of the exclusive fund of one of the acquirers and not out of the separate funds belonging to them respectively. For this reason Section 45 cannot have any application. Can this possible argument be accepted?

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19. If a very literal interpretation were accepted, it is possible to take a view that only when both have contributed at least some amount for the purchase, section 45 can have application, it can possibly be argued. It cannot apply when consideration is not paid out of the separate funds belonging to 9

the acquirers and is paid out of the fund exclusively of one of them. But the purpose of Section 45 will have to be borne in mind. The salutary rule of equity and fairness which finds expression in Section 45 cannot be ignored. If persons contribute in the proportion/ratio of 1:99, then in the absence of a contract to the contrary, following the 2nd part of Section 45 their share in the property will be 1/100 and 99/100. Merely because the funds are contributed exclusively by one of the acquirers, it appears to us that it would be unjust and unfair to deny such person the benefit of the salutary rule of equity and fairness which underlies Section 45. Separate funds referred to in the 2nd part of Section 45 must definitely be held to take in a situation where the consideration comes entirely and exclusively from the fund of one of the acquirers and nothing comes from the fund of the other. 0 : 100 (Zero is to hundred) is also a proportion in language and law. It cannot be held that because the contribution by one person is cypher, the rule of proportion in the 2nd part of Section 45 will not apply. We are, in these circumstances, of the opinion that the 2nd part of Section 45, following rule of purposive interpretation does take in a situation where consideration came exclusively from the fund of one of the 10

two joint acquirers with the other contributing nothing for the purchase. In such a situation, notwithstanding the fact that the name of one of them is included in the document for whatever purpose, such person cannot be held to acquire any rights.

20. Of course, the view taken above would mean that even though the name of a person is shown in the document of acquisition as one of the joint owners of property, he will be virtually divested of his rights in the property. Even if that happens, we are of the opinion that the equitable rule in Section 45 must apply and the other acquirer, who has contributed the consideration entirely and exclusively, must be held to have absolute rights over such property. Different would be the conclusion if the recitals in the document or evidence reveals a contract to the contrary. On the nature of the pleadings and evidence, it is impossible to hold that there has been a gift of half share of Ext.A3 property by the appellant to the respondent. Such a possible contention is not raised in the pleadings. There is total absence of evidence also in support of such a theory.

21. The learned counsel for the appellant, who alone is available to assist us, was requested to research and make submissions before court. No binding precedents in which this 11

issue is specifically considered has been brought to our notice. The decision in Palayya v. Kochukrishnan & Another [1973 K.L.R 547] has been perused by us. The play of Section 45 is not considered specifically in that decision. That was a case where acquisition was in the joint name of the husband and the wife; but the consideration for acquisition had come entirely from the Streedhanam given to the wife at the time of marriage. Relying on the provisions of the Christian Succession Act and principles of equity, it has been held that though the husband is shown as one of the joint owners in the document of acquisition, only the wife can claim title over the property. Though the play of Section 45 is not considered and reliance is placed on the specific stipulations of Section 5 of the Christian Succession Act, we are satisfied that the rule of equity accepted can apply while attempting to interpret Section 45 of the Act.

22. In Rajeswari v. Balchand Jain [AIR 2001 M.P 179], a Division Bench of Madhya Pradesh High Court had considered an analogous issue; though not exactly the same issue. The Madhya Pradesh High Court proceeded to hold that the mere fact “that somebody’s name is mentioned in the sale deed who is a member of the family, would not make him the 12

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owner when the evidence on record is clear” that there was no contribution by him towards the consideration.

23. Another decision squarely on the point interpreting Section 45 of the Transfer of Property Act by the Madhya Pradesh High Court appears in Syed Tufel Ahemad v. Syed Abrar Ahemad [1960 M.P. L.J S.N.204]. There, the court appears to have considered an exactly identical issue. The relevant portions available in the decision reported as short note show that applying the principle contained in Section 45 of the Transfer of Property Act it was held that the ” plaintiff’s share would be in proportion to the share of the consideration advanced by him. Therefore, as no part of the consideration was paid by the plaintiff, his share in the property would be nil”, notwithstanding the fact that the document of acquisition shows the name of the plaintiff as a joint assignee.

24. By an application of Section 45 and also the principles of equity and fairness underlying Section 45, we feel that the 2nd part of Section 45 must apply even when out of the two acquirers, contribution of one is nil and the other has exclusively and entirely paid the consideration. In such event, the one who has contributed will have absolute interest in the property 13

notwithstanding the fact that the name of the person who has not contributed any consideration is shown in the document as one of the acquirers for whatsoever purpose. In the contemporary societal context, it is very evident that the husband’s name figured in Ext.A3 document only in the view of the dependent, weaker and inferior position of the fairer sex. He was supposed, after the marriage, to maintain, protect and safeguard not only his wife, but also her property. The inclusion of his name in the document in the context would confer no exclusive or fractional rights on him, in the absence of any contract to the contrary.

25. More so, in a case like the instant one, where the parties are spouses and the purchase is in the name of the husband and wife, utilising consideration which came exclusively and entirely out of the share of the wife in her ancestral property.

26. Where spouses during the currency of marriage purchase any property, normally the irresistible inference must be that the property is purchased out of their common funds and the contribution is equal notwithstanding the fact that one of the spouses is not employed. But that rule cannot be imported blindly and mechanically and applied to the facts of the instant 14

case in the light of the circumstance that the document is executed shortly after and in connection with the solemnisation of marriage and in the light of the unambiguous recital that consideration came entirely from the wife – representing her share in her family property. To achieve the interests of justice, fairness and equity and to give true effect to the legislative purpose the language of the 2nd part of Section 45 must be held to cover a situation where consideration is paid entirely and exclusively from the separate fund of one of the acquirers. Section 45 of the Transfer of Property Act must hence squarely apply. Even if it were assumed that Section 45 may not apply, the equitable rule underlying the same must undoubtedly apply.

27. In any view of the matter, we are satisfied that the court below has gone completely wrong in taking the view that the declaration of exclusive title and consequential relief cannot be granted to the petitioner/appellant/wife. The challenge raised in this appeal hence succeeds.

29. In the result,

a) This appeal is allowed.

b) The impugned order is modified.

15

c) The appellant is granted a declaration that she has exclusive title over the plaint schedule property purchased under Ext.A3. She is granted a consequential injunction restraining the respondent from creating any document or encumbering the plaint schedule property. In supersession of the direction for payment issued, it is directed that the respondent/husband shall pay to the appellant/petitioner, an amount of Rs.10,000/- (Rupees ten thousand only) along with future interest @ 6% per annum from the date of the O.P till realisation from the respondent. She is also entitled for cost throughout.

(R.BASANT, JUDGE)

(M.C.HARI RANI, JUDGE)

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